Upsized American Airlines leads session; recent deals strengthen; funds lose $1.19 billion

By Paul Deckelman and Paul A. Harris

New York, Sept. 18 – American Airlines Group, Inc. made an unscheduled landing in Junkbondland on Thursday. The Fort Worth, Texas-based airline giant brought an upsized $750 million of five-year notes to market, syndicate sources said.

That was one of four deals producing a total of $1.6 billion of new dollar-denominated, fully junk-rated paper. The day’s volume was somewhat less than the $2.02 billion that had priced in four tranches on Wednesday, although most of that session’s deal volume was attributable to just one transaction – the two-part megadeal from Aecom Technology Corp.

In contrast, Thursday’s activity was more broad-based. Besides American Airlines, Simmons Foods Inc. did $415 million of secured seven-year notes, Anixter Inc. priced $400 million of seven-year paper, and SFX Entertainment Inc. added an upsized $65 million on to its existing five-year secured issue.

Traders saw the day’s new deals having firmed when they hit the aftermarket, and they said Aecom and Wednesday’s other new deals – York Risk Services, JAC Products and the split-rated Alcoa Inc. – were all up smartly from their respective issue prices.

Statistical indicators of junk market performance were higher across the board for a second consecutive session on Thursday.

However, another statistical measure, the flow of cash in to and out of high-yield mutual funds and exchange-traded funds, was solidly lower in the latest week, its third straight weekly setback.

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